Supplemental Coverage Option Now a Part of the Federal Crop Insurance Program

Abstract

The 2014 Farm Bill created Supplemental Coverage Option (SCO), a new add-on crop insurance option which provides supplemental coverage on a producer’s underlying crop insurance policy. SCO operates by mimicking a producer’s individual crop insurance coverage and increasing the protection to 86 percent of the producer’s actual production history (APH) yield and price election. An SCO loss payment occurs when the actual current year county yield (or revenue) is less than 86% of expected county yield (or revenue) at the time of planting. SCO became available with the 2015 crop year in select Maryland counties for winter wheat, and all corn and soybean counties except Allegany and Garrett. USDA’s Risk Management Agency (RMA) will begin looking at expanding covered counties and crops covered, and begin distinguishing by practices (such as irrigated compared to non-irrigated).